Alleges Mesa Air and United Airlines Violated Antitrust
Laws
In the latest shot
fired in an increasingly aggressive airline war; Atlantic Coast
Airlines has "amended" its complaint in the US District Court for
the District of Columbia against Mesa Air Group, Inc. alleging that
(among other things) Mesa and UAL Corporation are in violation of
federal antitrust law.
Specifically the claims include the following:
- United and Mesa acted in concert and conspired in violation of
Section 1 of the Sherman Act to eliminate ACA as a low-cost
competitor based at Washington Dulles International airport,
the 5th largest local travel market in the U.S. with more than
40 million local passengers per year. Under the Memorandum of
Understanding ("MOU") entered into between Mesa and United on
November 12, 2003, United has agreed to increase the fees it
pays to Mesa if Mesa's nominees are elected to ACA's board
and contract with United.
- Mesa's attempt to take control of ACA to limit competition is
in violation of Section 7 of the Clayton Act.
ACA has simultaneously filed a motion for a preliminary
injunction that would, among other things, prohibit Mesa from
moving forward with its consent solicitation and from taking any
other action to attempt to acquire control of ACA or its Board of
Directors.
ACA claims, "The facts speak for themselves. United has made it
clear that a critical element to its emergence from bankruptcy is
resolving its contract negotiations with ACA and maintaining its
presence at Dulles. Remarkably, their solution was to collude with
Mesa to eliminate a competitor -- United entered a written
agreement with Mesa which pays Mesa for doing nothing more than
delivering ACA's routes to United and preventing ACA from competing
independently as a low-cost carrier."
Among other things, the
amended complaint, as with the complaint previously filed on
October 28, 2003, alleges that Mesa made materially false and
misleading statements and omissions in violation of federal
securities laws in connection with its proposed consent
solicitation and potential exchange offer. Among other things, ACA
alleges that Mesa has failed to identify United Airlines, Inc. as a
participant in the consent solicitation and in Mesa's proposed
transaction, and also has omitted material information from its
consent solicitation regarding...
(i) Mesa's financial position and its reason for proposing to
acquire ACA;
(ii) questionable trading in Mesa stock by Mesa's chairman and
chief executive officer and other Mesa insiders shortly before the
announcement of Mesa's takeover proposal;
(iii) the inappropriate short-swing trades in which Mesa insiders
have engaged;
(iv) the self-dealing and lack of independence of Mesa's directors;
and
(v) the lack of independence of several of Mesa's nominees to ACA's
Board of Directors.
ACA currently operates as United Express and Delta Connection in
the Eastern and Midwestern United States as well as Canada. On July
28, 2003, ACA announced plans to establish a new, independent
low-fare airline to be based at Washington Dulles International
Airport. The Company has a fleet of 148 aircraft-including a total
of 120 regional jets. ACA employs approximately 4,600 aviation
professionals.
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